This section discusses the underpinning theories of the study—the JD-R and COR theories, the three constructs—transformational leadership, cross-cultural PsyCap, turnover intention—and the four hypotheses proposed in the study.
2.2. Transformational Leadership and Cross-Cultural Psychological Capital
Transformational leadership is defined as a leader’s ability to change the organizational status quo by developing the values, needs, and aspirations of followers [
14,
35,
36,
37,
38]. Bass and Avolio [
35] envisaged a transformative leader as one who can “broaden and elevate the interests of their employees, when they generate awareness and acceptance of the purposes and mission of the group, and when they stir their employees to look beyond their self-interest for the good of the group.” Transformational leadership is conceptualized as four dimensions described below:
(i) Idealized influence refers to a leader’s ability to elicit emotional responses from his followers and to serve as a role model for them to follow. This type of leader displays charisma and can instill a sense of belonging in their employees through the support, caring, and sharing of their vison and goals [
39,
40,
41]. Through their charm, trustworthiness, and visionary qualities, these leaders gain respect, adoration, and loyalty. As a result, when employees respect, admire, and trust their leaders, they are more likely to comply with their leaders’ orders and requests [
42].
(ii) Inspirational motivation is clearly demonstrated when leaders motivate employees to perform above and beyond typical expectations. This motivation arises from the leader’s ability to articulate a vision that inspires and instils confidence in employees to pursue that vision [
43,
44,
45]. Hence, employees are motivated to strive for better levels of performance and development based on the compelling vision created by their transformative leaders [
7,
35].
(iii) Intellectual stimulation refers to the leader’s behavior of raising followers’ understanding of the importance of results and ways of achieving them for organizational success [
35,
46]. Transformative leaders can push subordinates and inspire them to think more creatively by challenging the status quo [
29,
45]. The leader’s challenge in intellectually stimulating employees to embrace the vision’s innate values inspires the employees to transcend their own self-interests for the sake of the organization.
(iv) Individualized consideration is defined as a leader’s capacity to boost the self-confidence of their followers by providing individualized support, counsel, and attention [
35,
45,
46]. More specifically, this leader acts as a coach and mentor and encourages employees to achieve and grow to realize their full potential.
Transformational leaders are said to focus on the future and inspire followers to sacrifice self-interest for the achievement of organizational goals [
29,
47]. In contrast, transactional leadership emphasizes contingent reward, active and passive management by exception. This leadership applies positive reinforcement and punishment to influence subordinates and focus on the present rather than the future [
29]. Transformational leadership also known as charismatic leadership internalizes the goals of the organization for members, thus changing their behaviors, values, and priorities. A charismatic leader is admired for their attractive personality and magical quality that exudes power and influence. Charisma plays a key role in this leadership style [
44,
48,
49], which is reflected in the idealized influence dimension. In fact, charisma is at the “heart” to transformational leadership [
50]. It is generally associated with long-term relationships with employees as opposed to transactional leadership, which is based on exchange relations that are temporary. Past studies found that transformational leadership influence cross-cultural PsyCap better than transactional leadership in the hotel industry [
6]. One reason for this is most likely due to the contextual aspect of the hotel environment, in which personnel are required to provide service simultaneously at the same time and location. This places pressure on them to perform well, in addition to adversity in interpersonal communications with consumers from other cultures. As a result, employees need leaders to provide inspiration, support, and guidance to help them deal with such demands in the workplace. Transactional leaders, on the other hand, are more concerned with their own interests and are not interested in developing their employee’s personal growth.
PsyCap has been proven in studies to have a greater effect as a higher-order con-struct than on its individual components [
13,
17,
28,
51,
52]. Due to its state-like and malleable characteristics, it can be adapted in the cross-cultural context [
13]. According to Dollwet and Reichard [
52], PsyCap’s structure can help organizations improve cross-cultural interactions as dealing with individuals from many cultures can present a variety of challenges and uncertainty. For this reason, we applied the cross-cultural PsyCap structure to evaluate the positive PsyCap of the employees to capture the cross-cultural interactions considering the multicultural context of the hotel industry.
Cross-cultural PsyCap, which was based on Luthans et al.’s [
53] workplace PsyCap, was proposed by Dollwet and Reichard [
31,
52]. Rooted in a cross-cultural setting, the construct comprises four components as described below:
(i) Cross-cultural self-efficacy: Workers with high degrees of cross-cultural self-efficacy have great confidence in their ability to communicate efficiently with people from various cultures or in different environments, leading to an ability to learn more and adapt to new situations related to various positive job outcomes [
28,
52,
54]. Derived from Bandura’s social cognitive theory, people with high self-efficacy demonstrate a good psychological state of accomplishing demanding activities and having enough confidence to successfully address task-related issues [
14,
53,
55,
56].
(ii) Cross-cultural hope: Employees who have a high level of cross-cultural hope know how to deal with issues in cross-cultural interaction and are able to achieve targets [
31,
52]. Hope theory was developed by Snyder [
57,
58] and comprised of three components: goals (the mental targets that direct human behavior), pathways (the routes to the desired goals), and agency (the perceived ability to achieve goals through pathways). Frontline employees with a high level of hope will find it easier to work with people from different cultures and have the ability to think of many ways around cross-cultural interactions’ adversity.
(iii) Cross-cultural optimism: Workers who display a high amount of cross-cultural optimism may equate a strong cross-cultural relationship with their ability to communicate and negotiate effectively. Misunderstandings and miscommunications are common in cross-cultural interactions; therefore, employees with high levels of cross-cultural optimism will stay upbeat and “expect the best when engaging with people from various cultures” [
31,
52]. Seligman [
59] defines optimism in terms of attribution theory as one’s positive attribution regarding current and future successes.
(iv) Cross-cultural resilience: Employees who exhibit cross-cultural resilience will sustain their success amid obstacles, including language barriers and cross-cultural communication difficulties. The confusion and uncertainties that can be generated from cross-cultural interactions mean that resilience is a valuable psychological resource for employees in overcoming such adverse events [
31,
52]. The resilience trait was conceptualized by Luthans [
13] as the “developable capacity to rebound or bounce back from adversity, conflict, and failure or even positive events, progress, and increased responsibility” [
59,
60].
Prior research has suggested that transformational leadership plays a crucial role in developing the PsyCap of frontline employees [
14,
17,
37,
40,
61,
62,
63]. Specifically, the components of transformational leadership behavior (idealized influences, inspirational motivation, intellectual stimulation, and individualized consideration) encourage concerted efforts in followers to reach a higher cause and favorable outcomes. These components of transformational leadership can augment the self-efficacy, optimism, hope, and resilience of cross-cultural PsyCap [
14,
36,
37,
40]. By setting up a vision, transformative leaders can inspire followers to set higher targets, assess and expect positive outcomes (linked to optimism and hope). Additionally, transformative leaders have confidence in their ability to perform tasks successfully (related to self-efficacy) and demonstrate motivation and perseverance in the face of obstacles (linked to resilience) [
12,
53,
64].
Cross-cultural PsyCap is a relatively a new construct [
52]; hence, the antecedents and outcomes of cross-cultural PsyCap are not well established. However, based on the malleable characteristic of PsyCap, it is therefore expected that the positive outcomes of PsyCap would be applicable in the cross-cultural environment. To date, there have been only a handful of studies conducted measuring cross-cultural PsyCap, as compared to workplace PsyCap. This includes research by Maslakci and Sesen [
17] on the influence of multicultural personality traits of frontline employees on cross-cultural PsyCap in the hospitality industry. The results reveal that multicultural personality traits have a positive relationship with cross-cultural PsyCap and service quality. The study also investigated the mediating effect of cross-cultural PsyCap, where cross-cultural PsyCap acts as a mediator between the two variables. A study conducted by Gulistan Yunlu and Clapp-Smith [
65] revealed the positive effect of cross-cultural PsyCap on motivational cultural intelligence, which in turn relates to metacognitive awareness and perspective taking. This finding is corroborated by Lamont’s [
66] research of expatriates, in which cross-cultural PsyCap is positively connected to cultural intelligence. In a South African study, Kotze and Massyn [
28] explored the employee’s psychological well-being that includes burnout and work engagement. The findings revealed that cross-cultural PsyCap promotes employees’ work engagement and reduce burnout. This study evidently produced the same results as in workplace PsyCap on work engagement [
67]. In a study by Dollwet and Reichard [
52], cross-cultural PsyCap predicts cultural intelligence, openness to experience, ethnocentrism, and cross-cultural adjustment.
With regard to workplace PsyCap, studies related to transformational leadership and workplace PsyCap are many; however, studies in cross-cultural PsyCap are limited or non-existent. Past studies in leadership have demonstrated followers’ perceptions of leadership as a contextual condition that can promote workplace PsyCap [
12,
36,
37,
38,
40,
53]. In the hospitality literature, transformational leadership was found to have a positive association with workplace PsyCap. A study by Surucu and his team [
38] reveal a positive outcome between leadership styles and workplace PsyCap, while a study by Gashema and Kadhafi [
14] found that transformational leadership predicts workplace PsyCap and mediates the relationship between transformational leadership and innovative behavior
To this end, based on the discussion above, the following hypothesis is proposed:
Hypothesis 1 (H1). Transformational leadership is positively related to cross-cultural PsyCap.
2.3. Transformational Leadership and Turnover Intention
Employee turnover is a significant problem in the hospitality industry globally [
2]. A survey conducted by Deloitte [
6] revealed that turnover in the hospitality industry is almost double the average rate for all sectors, as can be seen in the U.K. and U.S., where the average employee turnover in the hospitality industry is 30% and 31%, respectively. Turnover intention is defined as an individual’s behavioral intention to leave an organization. Employees have influence over their turnover intentions, and behavioral intention is the best predictor of behavior, in this instance the actual turnover [
68]. There is strong evidence to suggest that a high turnover contributes to high personnel costs, low levels of employee morale and job satisfaction, and the perception of low service quality by the customer [
69]. There are many reasons why employees leave an organization. According to Whitelaw [
29], job demands and stress attributed to intense pressure to deliver efficient and effective service can impact the behavior and performance of hotel frontline employees. This condition may result in a high level of turnover intention that will eventually lead to actual turnover. In another study by Yavas, Karatepe, and Babakus [
70], the incivility of customers and co-workers, verbal aggression, additional workload, and pressures to achieve a work–life balance can lead to stress for frontline employees that ultimately results in turnover.
Hospitality and tourism studies have noted that leadership style, specifically transformational leadership, can influence an employee’s turnover intention [
11,
18,
19]. This is manifested through transformative leadership qualities in idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Being able to commend and attract employees through their charismatic characteristics, employees would want to identify with and emulate their role model. This type of leader is able to instill a sense of belonging in employees, thereby infusing the essence of allegiance to the organization. Leaders providing support and behavior that are consistent with the values of their followers may elicit positive emotions and motivations. Transformative leaders that care about their colleagues’ well-being tend to minimize job stresses while increasing employees’ self-esteem. Additionally, when a leader pays attention to their needs and wants, frontline employees are more likely to feel supported and appreciated [
21]. Conversely, leaders whose behavior is not in tandem with their followers’ values and thoughts may elicit negative behaviors and attitudes, such as the desire to leave [
71]. As a result, the consideration provided by transformational leaders establishes a strong basis for the management and their employees in lowering employee turnover intention. Based on the discussion above, the following hypothesis is proposed:
Hypothesis 2 (H2). Transformational leadership is negatively related to turnover intention.